hoarding bitcoins

[pbass]

Hi all,

I've only got interested in bitcoin recently and bought some. One thing that I'm wondering is why would anyone spend any bitcoin if there is that much potential  to go higher in value, I know that I myself would not not spend as I bought it in the hope of it going higher. If no one is really spending it what will this not mean it's not getting used apart from speculation and trading?
Thanks alot

[Sindelar1938]

Good question, I don't really have a non-abstract answer to that one either!

[Rhesus]

That's a good question, and the reason why many consider bitcoin an asset and not a currency.

[Sutters Mill]

Remember that eventually, somewhere in the next 10 years, ALL the Bitcoins will be mined and in the system. It's all speculation, but in my eyes, with less supply of coins and having to rely on trading or buying to get them, the prices should go up a lot.

Remember though that it can go either way. Look at how close GHash came to being able to perform a 51% attack. They've said that measures are in place so that it won't happen, but it just shows that ANYTHING can happen with it.

It's all speculation. For every 'expert' predicting it will go up, there are those saying the opposite.

[pbass]

Hi thanks for the reply,



I know overstock started accepting it and had over 100K in sales, I'd love to know what was bought and who bought them, longtimes holders or new bitcoin buyers. I think even if Amazon said they would now accept bitcoin not many would buy using their coins as this would be very positive for the price of bitcoin. If i was going to buy something on Amazon there is absolutely no way I would use Bitcoin as I would end up losing money, what if I bought something on amazon for 200 last year and bitcoin is now worth 10,000 per coin. This will stop so many from using it and mostly attract speculators. I think most of the people buying it now are speculating in the hope of it going much higher, I know I am

[BlockChainLottery]

It's nice that more and more businesses are using Bitcoin, but mostly via services like BitPay. You pay in Bitcoin, but the company immediately is getting dollars in return. That way there's no price pressure. Think about it, if you buy something for 10BTC worth 1000dollars and it is immediately offered again on the exchanges and somebody buys it for ~1000dollars the price pressure is neutral.

Maybe this conclusion is a little bit simplistic, but I believe it only will work if Bitcoin will circulate through the whole chain of companies and suppliers.

[pbass]

Hi Blockchainlottery,
thanks for the reply.
It's great that more retailers are accepting bitcoin but surely for it to be successful bitcoiners need to be spending their coins, and who would risk spending 1K worth of bitcoin if it could be worth 10k in a year, not me. Tit seems a lot more appealling to sit on the sidelines and just hold it instead of risking spending it and then see it go up a lot in value

[hope4me]

But maybe Bitcoin will have lower value in near future, so spending now make sence as well. Also, if you wait one year you can buy better electronic for the same money, so why buy electronic now ?

[BlockChainLottery]

Hi Blockchainlottery,
thanks for the reply.
It's great that more retailers are accepting bitcoin but surely for it to be successful bitcoiners need to be spending their coins, and who would risk spending 1K worth of bitcoin if it could be worth 10k in a year, not me. Tit seems a lot more appealling to sit on the sidelines and just hold it instead of risking spending it and then see it go up a lot in value

Yes, probably what I would do to.
Hopefully not everybody will continue to do that, then something is going to break. Should be okay if part is going to be used for investing or saving, and part to pay bills.

[pbass]

Hi hope4me,

thanks for the reply.

there is a big difference between waiting to buy this years electronic or else next years better one at a better price. Most people want and need to use the electronic so they will buy now and get a years use out of it and maybe sell the old one and upgrade.You seem to be missing the point I am making which is that the majority of people now are getting in to bitcoin to hold and try and make money, look at all of the investment companies buying just to be safe incase the miss a big increase in value, do you think that they are buying it to make purchases at online retail shops. If amazon announce they are accepting bitcoin, do you think bitcoin funds will rush to buy stuff online. No, they will sell their coin at a profit. People now know and see the potential it has to increase in value so they will just hold it and buy nothing with it. what about people that made purchases early on in Bitcoin, they must be kicking themselves with their little electronic purchase now worth millions.
I just want to know what will happen when no one spends bitcoin, I think all of the spending is a long time away as it will take a long time to become stable

[Flep182]

In the Netherlands you can order delivery food with bitcoin. Just as a novelty I'll probably try it when the exchange rate BTC/EUR is "high". On the other hand, I would rather sit on it for a bit longer. Looking at the guy paying 10.000 BTC for a pizza back in the days, he might just have been very happy if he kept them

[RodeoX]

I spend all the time. That what bitcoin is, a payment system. Then I buy some more and look for the next deal. By the time I find that next deal I will likely be buying at a steep discount, due to the appreciation in value. If I see the price crashing I hold and buy even more.

The spice must flow! 

[Flashman]

Remember that eventually, somewhere in the next 10 years, ALL the Bitcoins will be mined and in the system.

Do some reading, puhlease.

[pbass]

Hi Ribuck,

like I said before, there is a big difference between buying an electronic device like a TV.
Lets just say you bought a TV last year (2013)with bit coins. The TV was worth $1,000 and you paid in bitcoins. This year 2014 the value of bitcoins has increased that much that if you did not purchase your TV, you would now be sitting on a fortune and be very rich.

Now lets just say you bought a TV with normal dollars, sure there will be a newer model next year  which will be better thank your old one and maybe the same price. But you can sell your last years TV and get the new one. you are not really taking a big risk. But with spending your bit coins you are taking the risk that your coins will be worth an enormous amount more in a years time.
Comparing not spending your bitcoins to waiting till next year to buy your TV is not relative at all.
Do you understand my point about the possibility of todays bitcoins being worth much more tomorrow and by spending them you could be losing out.

[Torque]

Remember that eventually, somewhere in the next 10 years, ALL the Bitcoins will be mined and in the system.

I agree with the overall sentiment of your post, but just wanted to point out this one discrepancy.  It won't be until roughly the year 2140 before all 21M bitcoins have been mined.  See reference here:

"By 2140 there will be approximately 21 million bitcoins in existence and transaction processing will be solely incentivized by transaction fees."
http://en.wikipedia.org/wiki/Bitcoin

[Beef Supreme]

Hoard some, trade some, use some to buy crap off Overstock.

My hoard is like a savings account, always growing.

I keep some liquid so I can grow my stash by trading at opportune times.  Also, so I can show people the ease of using Bitcoin, and to micro-tip folks like Madbitcoins!

[pbass]

That was in 2013 and this year more people know about bitcoin. There are future valuations for bitcoin being thrown around like, 10k, 46k, 100k even 1 million and the people giving those valuations are no fools either. What was the price of bitcoin back when SR was raided? Since then the price has gone up a lot and lots of people are very bullish about it.
I just don't understand what happens if people keep hoarding them in hope of a 10k or 100k price. I bought mine with no intention of ever buying anything with them, which is what speculators do and a lot the bitcoin market is now speculators trying to make money from buying their coins at a lower price than selling them.

[Starscream]

Hi all,

I've only got interested in bitcoin recently and bought some. One thing that I'm wondering is why would anyone spend any bitcoin if there is that much potential  to go higher in value, I know that I myself would not not spend as I bought it in the hope of it going higher. If no one is really spending it what will this not mean it's not getting used apart from speculation and trading?
Thanks alot

Potential goes both way, such is the risk when investing. For some, who bought BTC at 10$ or even 400$, the current price is well enough for them to sell and smile all the way to the bank.

All I can say is, as an investor myself (though in the stock market) don't be greedy. Be content with what you earn.

[Ritual]

EDIT: The following applies if you think of Bitcoin as a currency. If you think of it as a commodity, then you have to take a serious think about what makes it valuable in the first place...

The only way Bitcoin will remain viable is if people circulate it. This is the basic idea behind all currencies.

If people don't spend it, somehow, then eventually it will be just a code sitting on a harddisk somewhere, with no value beyond that tiny portion's value in metal.

Most serious speculators realise that in order to have the currency retain (or gain preferably) value, you need to make it useful - i.e. to SPEND it.

The bitcoin you spend today will help make your next bitcoin worth more.

Rit.

[Killua]

Hi Ribuck,

like I said before, there is a big difference between buying an electronic device like a TV.
Lets just say you bought a TV last year (2013)with bit coins. The TV was worth $1,000 and you paid in bitcoins. This year 2014 the value of bitcoins has increased that much that if you did not purchase your TV, you would now be sitting on a fortune and be very rich.

Now lets just say you bought a TV with normal dollars, sure there will be a newer model next year  which will be better thank your old one and maybe the same price. But you can sell your last years TV and get the new one. you are not really taking a big risk. But with spending your bit coins you are taking the risk that your coins will be worth an enormous amount more in a years time.
Comparing not spending your bitcoins to waiting till next year to buy your TV is not relative at all.
Do you understand my point about the possibility of todays bitcoins being worth much more tomorrow and by spending them you could be losing out.

And what if it went down? It's a gamble either way. Let a person spend when they want. Also to answer your question if everyone held onto their bit coins and didn't sell or trade them then they would become worthless at that point. It would be seen as no more bitcoins are being produced because there are no transaction to be filled releasing any new coins. You can trade 1 Bitcoin off and 25 more drops right now when the transaction is actually completely finished. So I got rid of a bit coin now there are 25 more in existence. The pool dries up with no transactions. Things have value because we perceive it to have value. Think of gold right now. Would you buy stocks of gold? Does gold have any real value or is it just a pretty mineral? The truth is gold like bitcoins or any form of money doesn't exist it is only perceived to be worth something. If every person on the planet decided to not buy any more gold and just hold their stocks of gold for a year and no gold is produced that year? Would the value of gold go up or would drop tremendously in points? It drops big time. There are two ways to totally kill off the value of something. 1) Everyone holds onto it for a long period of time. No one can buy stock either because no one is selling it because no one is getting rid of it remember. 2)  A mass amount of people sell off at once.  For instance you don't have to worry about the 51% thing ever happening because if someone controlled the majority of the bitcoin which is what would happen and that is the reason of the talk about 51% then it no longer becomes free or open anymore as someone has taken it over and the market collapses so the person just took their billions and burnt it because they might have given everyone else a hit but they also took a huge hit and no one is going to take a 12billion dollar loss on purpose. So if someone gets close to about 45% they sell off about 5% now that 5% alone is such a huge sell that yeah they just made a huge chunk of change but that was a lot of people selling stock right there so the market value of bit coin dropped about 10 points or 45 dollars if you will. Now as spending goes back to normal there are a lot fewer bitcoins to be made now because so many coins dropped and were mined to complete that transaction that value did go up after everything leveled back off that it went up 14% in value and they made even more money by making their 40% more valuable than their 45% of the market they had.